Font Size Change
Easy Web Browsing tool

The Forum for Integrated Corporate Disclosure and ESG Dialogue to be Established

The Ministry of Economy, Trade and Industry(METI)established the Forum for Integrated Corporate Disclosure and ESG Dialogue(hereinafter referred to as the "forum")to provide an opportunity for companies and investors to hold dialogues in line with the Guidance for Collaborative Value Creation(hereinafter referred to as the "guidance").*

The forum aims to analyze good practices of leading companies that regularly disclose information to investors and to the public and to broadly publicize its findings, thereby encouraging more companies to disclose integrated information as an effort to contribute to enhancing their mid- to long-term value bearing in mind the corporate ESG(environment, social and governance)factors as well. In addition, the forum will strive to evaluate investment approaches that investors take for the purpose of developing and popularizing the most outstanding approaches. Through these efforts, METI hopes to encourage Japanese companies to further enhance their earning power by improving the dialogue between companies and investors.

*Note:The Guidance for Collaborative Value Creation is an abbreviation of the "Guidance for Integrated Corporate Disclosure and Company-Investor Dialogues for Collaborative Value Creation:ESG integration, non-financial Information disclosure and Intangible Assets into Investment," formulated by METI on May 29, 2017.

1. Aims of the forum

(1)Analyzing good practices of leading companies of integrated corporate disclosure

With the progress of the Fourth Industrial Revolution, companies are taking advantage of their tangible assets and their intangible assets, such as human resources, research and development, knowledge and know-how, and brand value, to secure mid- to long-term earning power. Moreover, being aware of the limitation of corporate management resources, some companies have started researching and undertaking business portfolio management, including M&A, business sales, or exit strategies.

Under these circumstances, disclosure of management philosophies, business models and strategies, governance and other information to investors will enable companies to win confidence from investors. In addition, the processes of this disclosure will also provide companies with opportunities to streamline and reflect on their ideal approaches to management and lead the results to new actions.

The forum's first aim is to hold discussions concerning good practices of leading companies that hold constructive dialogues with investors in accordance with the guidance as an effort to improve communication.

(2)Discussing investment approaches taken by investors

In recent years, investors and asset managers increasingly tend to incorporate ESG factors and activities based on the stewardship responsibility,(e.g., dialogues/engagement between companies and investors)into investment decisions and have greater interest in the mid- to long-term growth of companies.

As some companies are already discovering that ESG factors are indispensable elements in investment decisions for some investors, they are moving toward sustainability(sustainable societies)consciousness and responsible investment.

In these circumstances, some investors and analysts have started making use of the guidance, which provides appropriate methods of assessing intangible assets and corporate health using non-financial information, since they consider the guidance as a tool to more accurately determine corporate viability, growth potential and risk.

As its second aim, the forum will hold discussions concerning:[ⅰ]corporate analysis and investment practices, including comparisons with other relevant countries and ideal approaches to future education targeting analysts, approaches that investors and analysts have taken based on the guidance depending on the types of industries and their particular characteristics; and[ⅱ]ideal approaches that institutional investors should take to fulfill their stewardship responsibilities in taking action.

(3)Policy position of the forum

Under the Future Strategy 2017 and the New Economic Policy Package, the position of the forum is outlined in the following two items:

Future Strategy 2017

Rejuvenation of corporate governance and industries shifting focus from formalities to issues of substance

  • Japan should create(...)opportunities to analyze and promote best practices of companies that regularly provide information and reports in accordance with the Guidance for Integrated Corporate Disclosure and Company-Investor Dialogues for Collaborative Value Creation: ESG integration, non-financial Information disclosure and Intangible Assets into Investment(Guidance for Collaborative Value Creation; formulated by METI on May 29, 2017), and through this effort;
  • Japan should endeavor to encourage companies to provide information, including disclosures contributing to an increase in mid- to long-term corporate value, bearing in mind the ESG(environment, society and governance)factors and hold dialogues with investors, and it should also strive to develop and popularize investment approaches for investors to take.

New Economic Policy Package

Productivity revolution through improvement of business profits and investment promotion

  • In light of the importance of investment considering ESG (environment, society and governance)factors, Japan should smoothly establish(...)the Forum for Integrated Corporate Disclosure and ESG Dialogue and other necessary organizations that provide opportunities for investors and companies to hold dialogues.

2. Examples of topics for forum discussions

Based on the aims shown in Item 1 above, the forum will hold discussions concerning the following points of contention and will undertake and analyze specific case studies as examples of companies that have disclosed information and that hold dialogues with investors to determine future challenges. Following this, the forum will hold further discussions concerning required actions for the government and corporations.

  • Ideal approaches to encouraging companies to provide information(e.g., disclosure of information on intangible assets), through integrated disclosure and dialogue with investors;
  • Incorporation of Sustainable Development Goals(SDGs)and other efforts and initiatives into management strategies;
  • Ideal approaches to assessment of companies by investors in terms of integrated disclosures and disclosures of information on intangible assets, and approaches to practical steps that analysts should take, including furthering education;
  • Ideal approaches to activities based on the stewardship responsibilities that institutional investors have;
  • Future directions of policy measures(e.g., development of environments contributing to improving corporate value), taking the items above into consideration; and other issues.

3. Members of the forum

The forum will consist of business managers, institutional investors and others, bringing together officials and representatives as observers from related ministries and agencies as well as related organizations. METI may invite new members to participate or establish subgroups to discuss issues, if necessary.

For further details, see the Appendix of the Japanese language press release.

4. Meeting schedule

The first meeting of the forum will hold on December 18(Mon.), 2017. The meetings will not be open to the public in order to ensure that participating members have opportunities to exchange opinions in a free and frank manner. However, the materials distributed in the meetings and a summary of the minutes of the meetings will be made public.

Release date

December 15, 2017

Division in Charge

Industrial Finance Division, Economic and Industrial Policy Bureau

Ministry of Economy, Trade and Industry1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
Copyright Ministry of Economy, Trade and Industry. All Rights Reserved.